Odeo was a failed startup that was working on syndicating podcasts. At Odeo, Jack Dorsey came up with the idea for Twitter. Twitter seemed more promising than Odeo, so Odeo was shut down, and all focus went to Twitter.

When Odeo was shut down, Ev Williams bought out all Odeo investors. (The company had raised a series A.) Williams had been an angel investor in Odeo, and a member of the team working on the product. Williams had sold Blogger to Google, so he had some money.

Williams then distributed shares in Twitter to Dorsey and others that were working on the project.

Henshaw-Plath says he's not 100% certain who got what, but based on knowing the people involved he estimates, Jack Dorsey only got 5% to 15% of Twitter. He thinks Biz Stone got something similar. Also, these are "FOUNDERS SHARES, common stock, not preferred, but also not options." (This suggests his stake in the company is much smaller now after other investors have joined.)

Henshaw-Plath calls it "extremely generous" of Williams since it was, "his company and his money."

We're not so sure we agree with that. Yes, Williams was taking on risk, but Dorsey could have found investors and grabbed a bigger slice of the company for himself, assuming Henshaw-Plath's numbers are accurate.

We put in an email to Dorsey. If he says anything interesting, we'll update the post.

Update: In the comments below, it seems Henshaw-Plath weighs in and says Dorsey couldn't have found someone else to invest: " I don't think Jack could have taken twitter as it was, elsewhere. He built it as an engineer, in an internal hackday on company time, as a company project. It was property Beyond that, Ev bankrolled the whole thing for about a year before anybody started using it. And on top of that, Ev and Biz's promotion and connections had a lot to do with it taking off.

The initial version was not what made twitter what it is, but the work done afterwards"